for November 24th
Last week we had a marathon of 17 economic reports released. Monday kicked off with November’s New York Empire State Manufacturing index. The index rose to 10.2. Not bad, considering that the previous report came in at 6.2.
Twin reports, industrial production and capacity utilization, both disappointed. Production fell 0.1% from the +0.8% from the prior report, while capacity utilization edged down to 78.9% from 79.2.
When the markets closed, results were mixed, with no big winners or losers. The yield on the 10-year note rose 2 basis points to close at 2.34%.
On Tuesday the producer price index came out, and we actually saw some movement in October. It rose 0.2% from -0.1% in September. The PPI core, which eliminates food and energy prices, also moved up to 0.4% from 0.0%. The final report came from the NAHB; its index jumped to 58 from 54 in October. That was good news.
Wednesday was a relatively calm day, as only two reports were published -- building permits and housing starts for October. Housing starts fell to an annual rate of 1009K, likely weather-related. This was down from the 1038K starts in September. Building permits had a more impressive result, as they jumped to an annual rate of 1080K -- an increase of 49,000 units from September.
There were no expectations regarding Wednesday’s FOMC meeting, but it sounded like it might have gotten a little dicey. The whole idea behind QE2 was to lower interest rates as well as lowering the percentage of unemployed. Low interest rates did perk up the economy, but the unemployment rate has a ways to go, and some FOMC members seem to feel the cut off was premature. Either way, the Fed will make rate hikes in the future -- likely beginning in 2015.
Thursday featured seven reports, all close to predictions. First-time jobless claims for the week ended Nov.15 led off at 291K, 2,000 fewer claims than the previous week. Continuing claims fell by 73K to come in at 2330K for the week ended November 8.
Consumer price indices for October followed. The bare-bones CPI dipped to 0% from 0.1% in September. Meanwhile, the core CPI, which eliminates food and gas prices, edged up 0.2% from 0.1% the previous month. Still no inflation worries here!
The next report showed existing home sales jumping to a higher-than-expected annual rate of 5.26M units in October; that’s 80,000 homes sold.
If the Philly Fed Index was like any other report, it would have set the markets on fire. It is an important report concerning manufacturing in the eastern seaboard area, but it’s not in the same class as Chicago, for instance. However, in November the index rose to 40.8 from 20.7. This is a very notable increase which shows that manufacturers are humming along. This is a good sign for the economy.
The final report for the week was leading economic indicators for October. It rose to 0.9% from 0.7%, but it has zero impact on the market.
There were no economic reports issued Friday, but there was news that sent stocks to record highs, again. The feared recession in Japan is now a reality, but a surprise rate cut by China’s central bank, the first in more than two years, sent the European markets up; the U.S. markets followed.
Despite the short Thanksgiving week, there are several reports being released. No reports come out today, and tomorrow we have just a few, starting with the second estimate of the Q3 GDP. The markets expect that report to come in at 3.3%, while the briefing forecasters are thinking more along the line of 3.0%. This compares with the 3.5% reported from the prior report issue. Next in line is the Case-Shiller 20 city index for September. The prognosticators are expecting a slight downturn in this number to anywhere between 4.2% and 4.6% compared with the 5.6% that was reported previously. We also get the consumer confidence report, which is looking good right now. The report is expected to show our confidence level rising to 96.0 in November, up from 94.5 from October.
Wednesday we’ll get some reports that normally come out on Thursday, in addition to Wednesday’s reports. We’ll start the day with the initial and the continuing jobless claims reports. Initial claims are expected to go down, a result of temporary employment during the holiday shopping season. It is anticipated that initial claims will be at 285K for the week ended November 22, down from the 291K the week before. Continuing claims may go up to 2350K for the week ended on November 15, compared to the 2330K the week prior.
The durable orders report for October is next. A 0.7% decrease is expected. This follows a 1.3% decrease in September, so it’s a little bit better. The durable goods ex-transportation report follows and is expected to show an increase to 0.3%, which is better than the -0.2% decrease from the previous report.
The personal income report for October looks like we might be making a little more money. The forecasters are predicting this number to rise between 0.4% and 0.5%, compared to 0.2% from the prior statement. Personal spending is also predicted to be on the upswing, showing that we might be spending as much as 3% more in October.
The Chicago PMI report comes out next and covers November. This report might be a little less than the previous report, coming in around 65.0 compared with the 66.2.
Continuing on Wednesday, the final University of Michigan sentiment report for November is released. Only minor changes are expected, as the report might come in at 90.5 versus the 89.4 on the previous report.
The next announcement is on new home sales for October. There’s a huge discrepancy in predictions from the “experts.” The markets are anticipating an increase to 469K over the 467K from September, while the briefing forecasters are predicting a major decrease to 450K new homes sold. It’ll be interesting to see the actual result here. Pending home sales also demonstrate another discrepancy between forecasters. The markets would like to see pending home sales up by 0.8% while the briefing guys are thinking more like 0.5%. Still, these numbers are an improvement from the 0.3% last reported.
We want to wish all of you a Happy Thanksgiving. Be safe!
Realtors' Lender of Choice!
Copyright 2008 The Daily Communicator
Monday, November 24, 2014
Monday, November 3, 2014
MMRecap for November 3rd
Last Monday was a relatively quiet day, with only September pending home sales released. They rose 0.3%, which was better than the previous -1.0% decline; it was, however, far short of expectations, which ranged from 0.5% to 1.0%.
Although the Dow gained 12.53 points, that was about as good as it got. The Nasdaq closed up 2.22 points, and the S&P 500 fell 2.95 points. The 10-year Treasury slid to 2.27%.
Tuesday gave us the report on durable goods; it came in far better than the previous report of -18.3%. This report showed durable goods down only by -1.3%, a disappointing number when compared to the hopes of the forecasters that durable goods sales would improve by 0.5% or 0.6%. Orders for durable goods ex-transportation fell -0.2% on this report, far lower than the 0.7% from the prior report.
Case-Shiller reported that home sale prices rose 5.6% for the month of August. This was slightly down from the 6.7% rise in prices from July. We also had the consumer confidence report for October that came out Tuesday. Good news here! The report showed an increase in consumer confidence with a score of 94.5. This was a nice jump from 89.0. All this good news had a positive effect on the markets as the Dow rose 187.81 points, or 1.12%, the Nasdaq gained 78.36 points, or 1.75%, and the S&P 500 closed up 23.42 points, or 1.19%. The 10-year yield rose 3 basis points to finish the day at 2.30%.
Wednesday morning the Fed announced that QE3 was finished, done, over with! That was the only report that counted, and the markets reacted a bit, but nothing drastic. When the markets closed, the Dow was down 31.44 points, the Nasdaq closed at -15.07 points and the S&P 500 slipped slightly, closing at -2.75 points. The 10-year yield rose 4 basis points to end the day at 2.34%.
On Thursday we had the usual reports on initial and continuing jobless figures, as well as the GDP report. Initial jobless claims came in at 287K -- 3000 more new claims than the week before. Continuing claims, those receiving unemployment benefits for a second or more weeks, also went up, and the results for the week ended October 18 came in at 2384K, compared with 2355K the prior report.
The GDP report for Q3 was disappointing as the economy only grew 3.5%. This was better than had been forecasted but down from the 4.6% from the previous quarter. This news didn’t seem to affect the markets much, as all of the indices were up for the day. When the bell rang on Thursday, the Dow was up 221.11 points, or 1.30%, the Nasdaq rose 16.91 points, or 0.37% and the S&P 500 went up 12.35 points, or 0.62%. The 10-year yield dropped 2 basis points to close at 2.32%.
Friday was a busy day in spite of it being Halloween. Lots of reports came out to end the month. The first report was on personal income for the month of September. Although it was up by 0.2%, that was less than the expected amount of 0.3%. Not a big deal. On the other hand, personal spending took a dip to -0.2%, after a +0.5% increase in August. So apparently the people who went out and spent some of their income in August took a breather in September.
No surprise on the PCE report, which came in as expected for September and remained at 0.1%. The employment cost index for Q3 held at 0.7%. This has been constant for the last two quarters. The Chicago PMI had good news and reported an increase to 66.2 for October. This is up from the 60.5 reported for September. Finally, the month ended with the Michigan sentiment report for October. More good news, as the report inched up to 86.9 from 86.4. Though not earth-shaking, an increase in confidence is always a welcomed sign. The markets were happy last Friday, and all of the indices ended up. The Dow closed up 195.10 points, or 1.13%. Nasdaq closed up 64.60 points, or 1.41%, and the S&P 500 closed up 23.40 points, or 1.17%. The 10-year yield rose 3 basis points to close the week at 2.35%.
According to the MBA, mortgage applications for the week ended October 24th decreased by 6.6% on a seasonally adjusted basis from the previous week. Refinance applications also decreased by 7% from the prior week. The refinance share of mortgage activity remained unchanged at 65% of total loan applications. The average contract for a conforming 30-year fixed rate mortgage increased to 4.13% from 4.10%.
Although Halloween is over, we have another scary week coming up, as there are 16 reports scheduled. Some of these reports are market movers, some aren’t.
Today’s first report is the ISM index, a look at manufacturing in the U.S. during October. It had previously dipped to 55.7 from 56.6. That will be followed by the report on construction spending in September, which already made a good recovery from August, rising 0.7% vs. 0.8% the previous month.
On Tuesday we get a peek at the trade balance, which had been edging down in an effort to reduce the $40.1B deficit. It was slowing a bit, but the last couple of months it has returned to its evil ways, and that is expected to continue. The next report is factory orders for September which are predicted to drop -0.5%; but that’s a lot better than the August report of -10.1%.
Because the employment numbers come in on Thursday, the ADP employment change report for October will be released Wednesday, along with the October ISM index on the service sector. This is a far less important report than the manufacturing ISM. Neither one of these reports generally affect the markets much.
On Thursday we have the initial and the continuing jobless claims reports. Thursday’s final report will be on Q3 productivity and unit labor costs. Last month the productivity level came in at 2.3%. The analysts are predicting this report to show only about 1.5%. The unit labor cost is expected to go up to 0.9% from the previous -0.1%.
Friday is the biggie, with the unemployment report for October to be released. Unemployment dropped below 6.0% (actually it came in at 5.9%) in September for the first time since July, 2008. It is expected to stay about the same. Next up is the nonfarm payrolls report, and the analysts are divided about their predictions. Some believe the figure will come in at about 235K, while the other group is betting on 275K. The previous report indicated 248K jobs in the nonfarm payrolls.
That wraps it up for this week.
Realtors' Lender of Choice!
Copyright 2008 The Daily Communicator